Lance Wilkes

London sized ICHRA and named the cost wins, ABA moderation and payment-integrity algorithms targeting AI up-coding in sepsis, before handing low utilizers to Asher.

Sarah noted lighter RFP year with only small number of larger states in or planning procurement. States aligning RFP processes (Indiana reprocuring entire program at once) and considering moving additional higher-acuity populations into managed care due to OB3 and budget pressure. Net trend initiatives around network, clinical programs, payment integrity, and fraud drive to 4.5% with strong pipeline for rest of year.

Sarah noted continued low-level membership attrition pressuring trend, with behavioral health (50% of excess, ABA primary), home health/HCBS, and high-cost drugs as consistent drivers throughout 2025. Drew added inpatient trend looks good and TANF-only population excluding behavioral health shows normal historical trend, enabling targeted intervention. Competitive dynamics showing rate pressure impacting smaller nonprofit plans, potentially creating membership growth opportunities.

Sarah noted consistent constructive rate dialogue for 18+ months with states integrating more recent data. State budget pressures create opportunity for managed care expansion as states look to carve in fee-for-service populations and optimize programs.

Sarah emphasized margin over membership for 2026, thinking differently about product tiers and network partners. Also advocating for earlier demographic data availability and locking down policy changes before pricing deadlines.

Drew noted specialty pressure most acute in non-LI PDP from max OOP change to $2,000. Pharma pushing patients from assistance programs. Sarah noted Medicaid specialty costs will flow to rates.

Sarah noted Texas protest working through legislature/courts, Georgia protest months away from feedback. ICHRA a key investment area. M&A surveillance ongoing.

Felicia said 2027 ACA bidding mirrors 2026's disciplined, market-specific pricing for sustainable margin; she and Aimee reiterated disciplined, economics-based Medicaid exit criteria.

Morgan noted second blue bid activity slightly lower in year 2 vs first year. Roughly 2 million members in pipeline broadly. National account renewal rates at 99.3%. Strong Carelon Rx cross-sell especially upmarket.

Felicia confirmed mid-single-digit composite rate increase in 2026, with January rates (about a third of premium) in line with expectations but still lagging trend. Rate discussions increasingly tied to broader program changes as states face budget challenges. Tightening cost management on behavioral health, ABA, and program integrity.

Felicia confirmed wide variability across 24+ markets, outlined multi-factor evaluation framework for potential exits but emphasized preference to remain. Pete reported strong progress on Kroger Specialty Pharmacy script migration on track for year-end, with plans for further diversification into external scripts in 2026.

Mark highlighted ACA ER utilization at nearly 2x commercial levels, with behavioral health and specialty pharmacy also elevated. PYD was approximately $40 million, nothing notable.

Pete detailed >60% Q1 growth in Carelon Services with balanced internal and external expansion. Specialty pharmacy migration from BioPlus and Kroger proceeding thoughtfully.

Mark provided clear breakdown: Medicaid elevated but stable in behavioral health and inpatient, Medicare elevated but manageable in post-acute, commercial strong and priced for.

Management described a very strong national accounts season and Optum Rx retention in the high 90s with new client wins tied to its transparency model.

Bobby Hunter deferred formal membership guidance but pointed to an expanded footprint and growth focus on D-SNP, C-SNP and high-value HMO plans.

Krista detailed care management, operating discipline and 2027 payer contracting progress, confirming margins are slightly ahead of plan.

Schumacher confirmed commercial trends approximately 11% for both 2025 and 2026. With 50% of January insured business resolved, encouraged by persistency and rate yield. Surest continues capturing share with robust 2027 pipeline. Employers increasingly combining medical and Rx benefits through Optum Rx integration.

Hemsley described much more intensive monthly business-by-business reviews covering financials, operating metrics, external stakeholder relationships, and remediation progress. Far-reaching changes to people across entire enterprise. New tone and expectation setting with faster decision-making. Will continue drilling down through 2026 planning process.

Rex confirmed no one-time favorable items in Q1 and no impact from preauthorization changes. IRA-driven Part D seasonality change about 90 basis points impact in quarter. V28 Medicare funding reductions roughly 60 basis points. Wellness visits in certain populations at 2x year-ago levels driving follow-on specialty care.

Witty identified claims processing friction as key dissatisfaction driver. Said 85%+ of held-up claims are administrative not clinical. Cited UHC app visits up 66%, digital engagement up a third, phone calls down 10%. Committed to standardized real-time processing across industry.

Gave the directional trend difference but declined to break out CenterWell subsegment performance beyond noting de novos remain in the J curve.

James described transformation office stood up ~17 months ago with mix of external hires and internal transfers. Dual role: tracking initiative progress with escalation, and providing surge resources (analytical horsepower, execution capacity). Primary change ownership stays with business units. George added transformation office helps keep eyes on 5-year horizon.

George confirmed no change in value-based provider financial performance or margin proportions. Took back Part D risk from VBC partners in 2025; provided Stars headwind support in 2026. Celeste said 90% of incremental investments were in medical costs.

George explained duals deliver outsized margins from year 1 unlike traditional Medicaid J-curve. Growing into Michigan HIDE, Illinois, South Carolina. James mentioned emerging direct-to-employer pharmacy opportunity.

Celeste detailed CenterWell by segment: Home in line, PCO and Pharmacy ahead. Revenue growth from patient growth and favorable PPD.

Mike noted contract labor at 4.3% approaching pre-pandemic 4.1-4.2%. Wage inflation in line with expectations. Physician costs still elevated at ~10% YoY increase but as expected. Clinical labor market pretty stable.

Mike detailed respiratory volumes in line with prior year Q1. Patient balances up slightly more than historical mid-single-digit increases, influenced by exchange growth. Exchange collectability lower but not material impact.

Mike provided detailed labor metrics: contract labor down 8%, at 4.5% of SWD. Wage inflation stable. Galen College enrollment growing. On Medicaid margins, noted total Medicaid reimbursement still short of covering cost of care.